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$15 Million from Wells Fargo Will Ramp up LISC-Kiva Support for Vulnerable Small Businesses

Wells Fargo is granting $15 million to LISC to support small businesses reeling in the wake of the economic fallout from Covid. LISC will use the funds in a partnership with Kiva, the crowd-funding social impact platform, to get grants and low-cost loans to more than 2,800 entrepreneurs in urban and rural markets nationwide. The capital will be targeted at preventing further loss in revenue, sustaining employment and averting vacancies among vulnerable small business owners.

The excerpt below was originally published by Wells Fargo:
Helping entrepreneurs stay ‘Open for Business’

Helping entrepreneurs stay ‘Open for Business’

Wells Fargo is donating approximately $400 million in Paycheck Protection Program processing fees through a new program to support small businesses owned by people who have been hit hardest by COVID-19.

With 41% of their businesses closed because of the COVID-19 pandemic, Black business owners have faced the largest shutdown of any segment in the country, said Ron Busby, president and CEO of the U.S. Black Chambers, Inc.

“If you ask any small business owner their No. 1 concern, they will say access to capital,” Busby said. “But when you ask a Black business owner, they will say their No. 1, their No. 2, as well as their third concern, is access to affordable and accessible capital. That means capital that’s available in their community. That means capital that’s not at a 20% rate. And that means capital that’s not going to be tied to other receivables or other assets that we own.”

To help small businesses impacted by the ongoing COVID-19 pandemic keep their doors open, retain employees, and rebuild, Wells Fargo is making an industry-leading commitment by donating approximately $400 million in gross processing fees from the Paycheck Protection Program, as announced in April. Through a new Open for Business Fund, Wells Fargo will provide support for nonprofit organizations who serve small businesses, particularly businesses owned by underrepresented individuals — a group disproportionately affected by the pandemic — to provide needed capital, offer technical support, and develop long-term resiliency programs.

As of June 30, Wells Fargo funded loans under the PPP for more than 179,000 customers, totaling $10.1 billion. More than 60% of those were for loans of $25,000 or less, and 84% had fewer than 10 employees.

“By donating approximately $400 million in processing fees to assist small businesses in need, Wells Fargo’s Open for Business Fund creates opportunities for near-term access to capital and addresses the road ahead to meaningful economic recovery, especially for Black and African American entrepreneurs and other minority-owned businesses,” said Wells Fargo CEO Charlie Scharf. “Wells Fargo is committed to helping small businesses impacted by COVID-19 stay open and get back to growth.”

‘An infusion of much-needed support to the small business community’
Small businesses are the fabric of our communities, and we know they’re hurting,” said Jenny Flores, head of Small Business Philanthropy for Wells Fargo. “We see the Open for Business Fund as an effort to provide an infusion of much-needed support to the small business community. We want to make sure they can open and stay open.”

According to data from Wells Fargo’s June Gallup/Small Business Index, more than half of the small business owners surveyed expect either stagnant or decreasing revenues in the next 12 months.

The program is launching with an initial $28 million aimed at supporting Black- and African American-owned small businesses, which are closing at nearly twice the rate of the industry, according to the National Bureau of Economic Research (PDF). The first grantees are:

  • Expanding Black Business Credit to support the launch of the Black Vision Fund, which will increase capital to Black-focused Community Development Financial Institutions, also known as nonprofit or community lenders, to close the racial wealth gap in African American communities.
  • LISC (Local Initiatives Support Corporation) will team up with social impact platform Kiva to provide grants and low-cost capital to more than 2,800 entrepreneurs with a focus on preventing loss in revenue, sustaining employment, and averting vacancies among vulnerable small business owners in urban and rural markets nationwide.

Read the full press release [+]...
 

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